Judge Tosses FTC Antitrust Complaint on Altria, JUUL

A federal administrative law judge, in a decision announced Thursday (Feb. 24), dismissed a Federal Trade Commission lawsuit that had accused tobacco giant Altria Group and electronic cigarette-maker JUUL Labs of violating antitrust laws.

The government already has appealed the decision by Judge D. Michael Chappell.

In its 2020 complaint against the company, the FTC argued that arrangements, including Altria’s purchase of a 35% stake in JUUL, threatened to undermine competition in the electronic cigarette space.

“Judge Chappell concluded that Complaint Counsel failed to demonstrate both the anticompetitive effects of the non-compete provision, and a reasonable probability that Altria would have competed in the e-cigarette market in the near future, through marketing a competing product independently, or through collaboration or acquisition,” the FTC said in a news release.

In his 263-page decision, Judge Chappell also noted that a non-compete agreement between Altria and JUUL covered a submarket composed of types of electronic cigarettes that JUUL was unlikely to produce even without the non-compete.

The case is so complex that Chappell informed the parties on two occasions that he needed more time than usual to complete his ruling, and now the parties have agreed to give each other extra time to file appeal-related materials.

Related: FTC Probes Altria-Juul Tie-Up For Possible Antitrust Issues

When the complaint was filed on April 1, 2020, Ian Connor, director of the Federal Communications Commission’s Bureau of Competition, said that Altria and JUUL had been “competitors in the market for closed-system e-cigarettes” for several years.

“By the end of 2018, Altria orchestrated its exit from the e-cigarette market and became JUUL’s largest investor,” Connor continued. “Altria and JUUL turned from competitors to collaborators by eliminating competition and sharing in JUUL’s profits.”